What to Change: Character or Incentives?

The development of certain character strengths, such as prudence and drive, clearly contributes to individual and collective success, as last week’s publications from our Character and Opportunity Project highlighted.

But it does not automatically follow that policy-makers’ efforts are always best focused on the development of these skills. For one thing, they may be hard to get at through specific interventions. Just because they are a good thing doesn’t mean policy can engender them: love, too, is a good thing, but it is hard to imagine successful policies to raise the level of love in a society. We have to be alert to the danger of what philosopher Jon Elster described as ‘willing that which cannot be willed’.

Behavior and the Brass Law

I have just moderated a discussion here at Brookings on two excellent, contrasting books by Peter Schuck and Edward Kleinbard on the role and scope of government in the US. Among the many issues raised in his authoritative overview, Schuck reminds us of Peter Rossi’s ‘Laws’ of policy, including the Brass Law of Evaluation which is that “the more social programs are designed to change individuals, the more likely the net impact of the program will be zero.”

Rossi’s argument, which Schuck echoes, is that policies that go with the grain of existing values and character and that straightforwardly incentivize behavior change will be more effective – and certainly more cost-effective – than those that seek to alter values or character. As Schuck puts it: “It is easier to change people’s incentives than to change their values or character. Policy environments are more tractable than the people who inhabit them.” (p.367)

As a general rule, this is surely true. It is easier to provide tax incentives to save or adopt auto-enrollment into a pension scheme than to create a savings culture among millions of people. It may be more effective to bribe mothers to quit smoking while they are pregnant than to turn them into permanent non-smokers. It is easier to pass seat belt laws than to educate an entire populace on how to rationally assess the risks of injury or death in a car accident.

Character Strength versus Paternalism

But notice something about this list: it has a decidedly paternalistic feel. Essentially, policy-makers conclude that since people can’t be expected to do the right thing, they will have to be bribed, cajoled or forced into doing it. For sure, this will usually be more efficient. But the result is to strengthen the hand of the state over individuals.

The development of character strengths, along with knowledge, cognitive skills, and social capabilities, is part and parcel of building self-efficacy. Our goal should be to create strong individuals able to chart their own course through life, rather than individuals reliant on the benign institutional paternalism of others. Character strengths are hard to cultivate through policy. But in the end, character strengths are an important part of what each of us needs, in order to need policy a little less.